DEAL v. VELEZ et al
OPINION. Signed by Judge Joseph H. Rodriguez on 3/20/2017. (tf,)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
PATRICE DEAL, EXECUTRIX OF THE :
ESTATE OF GRACE DEAL, DECEASED,
JENNIFER VELEZ, et al.,
Hon. Joseph H. Rodriguez
Civil Action No. 14-6444
This matter is before the Court on Defendants’ motion to dismiss the
Amended Complaint for lack of jurisdiction. The Court has reviewed the
submissions and decides the matter based on the briefs pursuant to Fed. R.
Civ. P. 78(b). For the reasons stated here, Defendants’ motion will be
granted in part and denied in part.
This case arises out of a series of applications for assisted living
benefits made by or on behalf of decedent Grace Deal, which were originally
denied by the State of New Jersey in conjunction with the Burlington
County Board of Social Services.1 (Am. Compl. at ¶¶ 10-13, 17.) Although
Defendants are Jennifer Velez, former Commissioner of New Jersey
Department of Human Services, Meghan Davey, Director of New Jersey
DHS Division of Medical Assistance and Health Services (“DMAHS”),
Charles Sanfilippo, Director of Burlington County Board of Social Services
the State eventually granted Deal’s application, Plaintiff Patrice Deal,
Executrix of the Estate of Grace Deal, asserts that Defendants wrongly
determined that Grace Deal was not eligible for the Medicaid Waiver
Program to cover assisted living services of $63,411.28 for the period from
July 1, 2014 to February 28, 2015. (Am. Compl. at ¶¶ 13, 69, Ex. C.)
Grace Deal applied for Medicaid benefits through the Global Options
Assisted Living Medicaid Waiver (“GO”) Program, the only Medicaid
funded program in New Jersey that covered benefits received for assisted
living facilities, on January 6, 2014. (Am. Compl. ¶10.) On March 4, 2014,
BCBOSS, the county welfare agency, denied Deal eligibility for the GO
Program because on December 13, 2013 she had entered into a Consent
Order reducing the amount of monthly spousal support to which she was
entitled pursuant to a March 17, 2010 settlement agreement which
accompanied her Limited Divorce from Bed and Board from $2055 to
$1,500. (Am. Compl. ¶¶ 47-50; Ehrenkrantz Cert. Ex. A, B, C.) BCBOSS
presumed that Deal’s request for the Order decreasing her monthly support
was improperly motivated to obtain Medicaid, which had a $2,163 monthly
(“BCBOSS”), and Ronald Yulick, Adult Medicaid Supervisor, Burlington
County Board of Social Services (collectively “the State” or “Defendants”).
Velez and Davey advanced the motion presently before the Court [Docket
Entry 51], which the County Defendants joined in by letter [Docket Entry
income limit 2, contrary to N.J. Admin. Code 10:71-4.10(b)3, which
prohibits disposal of assets at less than fair market value for five years prior
to application for benefits. (Am. Compl. ¶¶10, 52; Ehrenkrantz Cert. Ex. C.)
Plaintiff timely filed an administrative appeal on March 12, 2014.
(Am. Compl. ¶ 53.) On June 20, 2014, following a state administrative
hearing, the administrative law judge issued an initial decision affirming
the denial of Deal’s eligibility. (Am. Compl. ¶¶ 53-55; Ehrenkrantz Cert. Ex.
D.) On August 1, 2014, the DMAHS issued a final agency decision affirming
the administrative law judge’s decision denying Deal GO Program
eligibility. (Am. Compl. ¶¶ 56; Ehrenkrantz Cert. Ex. E.) Plaintiff did not
appeal that decision to the Superior Court of New Jersey, Appellate
Division. Rather, on October 17, 2014, Plaintiff filed the Complaint in this
In July 2014, DMAHS phased out the GO Program and instituted the
Managed Long Term Care Services and Supports (“MLTSS”) Waiver
Program as a new way to help individuals live in the community for as long
as possible with services and supports. 42 U.S.C. § 1315(b). Beginning July
1, 2014, participants in Global Options and three other waiver programs —
At the time, Deal also received $487.90 per month in Social Security.
(Ehrenkrantz Cert. Ex. D.) As such, BCBOSS determined that Deal’s
monthly income was $2542.90. (Ehrenkrantz Cert. Ex. D.)
AIDS Community Care Alternatives Program (ACCAP), Community
Resources for People with Disabilities (CRPD) and Traumatic Brain Injury
(TBI) — were automatically enrolled in the MLTSS program through a
Medicaid managed care organization (MCO). Relevant to this case is that
under the MLTSS Waiver Program, as of December 1, 2014, Medicaid
coverage was expanded beyond nursing facilities to assisted living and
home care; an individual who was not on the program and had monthly
income exceeding the cap could establish a Qualified Income Trust (“QIT”)
QIT in order to be approved for Medicaid because income deposited into
the QIT is disregarded in determining income eligibility. 42 U.S.C. §
Defendants’ attorney advised Plaintiff’s attorney during a December
23, 2014 phone call that Plaintiff should file a new Medicaid application for
assisted living benefits. (Am. Compl. ¶¶ 101-02.) Deal filed a second
Medicaid application January 20, 2015 and set up a Qualified Income Trust
the next day. (Am. Compl. ¶¶ 12, 103-04, Ex. D.) She alleges that in
processing this second application, Defendants required Deal to obtain
judicial modification of her monthly spousal support payment back to
$2055, which she did effective by court Order dated June 5, 2015. (Am.
Compl. ¶¶ 60-63, Ex. A; Ehrenkrantz Cert. Ex. I, L, O.) Deal passed away
June 28, 2015. (Am. Compl. ¶ 64.)
On July 22, 2015, DMAHS determined that Deal was eligible for the
Medicaid waiver program as of June 1, 2015, and based on undue hardship
while seeking legal action to reverse the “transfer of assets,” granted her
eligibility effective March 1, 2015. (Am. Compl. ¶¶ 65-66, Ex. B.)
Plaintiff asserts violations of Deal’s statutory rights as granted by the
Federal Medicaid Act, enforceable under 42 U.S.C. § 1983. See Am. Compl.
at ¶¶ 74, 77, 80, 83, 108. The Amended Complaint asserts claims for: (1)
failure to establish an appropriate date of eligibility (July 1, 2014 3) in
operation of a Medicaid Assisted Living Waiver in violation of 42 U.S.C. §
1396a(a)(34); (2) denial of due process in operation of the Medicaid AL
Waiver in violation of 42 U.S.C. § 1396a(a)(3) by failing to notify Deal that
she was denied coverage for the time between the effective date of eligibility
(July 1, 2014) and the date in which she was enrolled; (3) failure to provide
Plaintiff contends she was eligible under the GO Waiver Program for
Medicaid benefits when she first applied, and states “Had she been living in
a nursing facility on January 1, 2014, and subsequently, Defendants would
have begun Medicaid coverage for nursing facility services effective July 1,
2014” when the MLTSS Waiver Program was approved. (Am. Compl. ¶¶ 4,
22, 31, 71.) In opposing the motion to dismiss, however, Plaintiff argues
that she is entitled to coverage from December 1, 2014 through February
28, 2015, in what appears to be an attempt to obtain three months of
retroactive Medicaid benefits.
medical assistance with reasonable promptness in operation of the
Medicaid AL Waiver in violation of 42 U.S.C. § 1396a(a)(8); (4) denial of
due process in operation of the Medicaid AL Waiver by failing to give full
faith and credit to the December 13, 2013 Superior Court Order reducing
Plaintiff’s spousal support; and (5) declaratory relief directing Defendants
to properly process Deal’s Medicaid application and determine her to be
eligible for Medicaid effective July 1, 2014.
Defendants argue that they are entitled to sovereign and/or qualified
immunity under the Eleventh Amendment. Defendants further argue that
Plaintiff’s claims for relief are moot in that Deal was granted Medicaid
Waiver Program eligibility.
A motion to dismiss for lack of subject matter jurisdiction under Fed.
R. Civ. P. 12(b)(1) must be granted if the court lacks subject matter
jurisdiction to hear a claim. In re Schering Plough Corp. Intron/Temodar
Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). When a
defendant files a motion under Rule 12(b)(1), the plaintiff bears the burden
of establishing subject matter jurisdiction for the sake of remaining in
federal court. Gould Elec., Inc. v. United States, 220 F.3d 169, 178 (3d Cir.
2000). The Court applies this standard to the issue of immunity. See Young
v. United States, 152 F. Supp. 3d 337, 344 (D.N.J. 2015).
A motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) may involve either a facial challenge to subject matter jurisdiction
or a factual challenge to the jurisdictional allegations. Gould Elec., 220 F.3d
at 176. If the defendant’s attack is facial—i.e., “asserting that the complaint,
on its face, does not allege sufficient grounds to establish subject matter
jurisdiction”—a court must accept all allegations in the complaint as true.
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006).
Alternatively, a defendant may “challenge a federal court’s jurisdiction by
factually attacking the plaintiff's jurisdictional allegations as set forth in the
complaint.” Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891
(3d Cir. 1977). A factual challenge attacks the existence of a court’s subject
matter jurisdiction apart from any of the pleadings and, when considering
such a challenge, a presumption of truthfulness does not attach to a
plaintiff's allegations.” Id.; see also Martinez v. U.S. Post Office, 875 F.
Supp. 1067, 1070 (D.N.J. 1995).
Alternatively, Federal Rule of Civil Procedure 12(b)(6) allows a party
to move for dismissal of a claim based on “failure to state a claim upon
which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A complaint should
be dismissed pursuant to Rule 12(b)(6) if the alleged facts, taken as true,
fail to state a claim. Fed. R. Civ. P. 12(b)(6). When deciding a motion to
dismiss pursuant to Rule 12(b)(6), ordinarily only the allegations in the
complaint, matters of public record, orders, and exhibits attached to the
complaint, are taken into consideration. 4 See Chester County Intermediate
Unit v. Pa. Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). It is not
necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561
F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether
the plaintiff will ultimately prevail. Watson v. Abington Twp., 478 F.3d 144,
150 (2007). Instead, the Court simply asks whether the plaintiff has
articulated “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
“A claim has facial plausibility 5 when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
Although a district court may not consider matters extraneous to the
pleadings, a document integral to or explicitly relied upon in the complaint
may be considered without converting the motion to dismiss into one for
summary judgment.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383,
388 (3d Cir. 2002) (internal quotation marks and citations omitted)
This plausibility standard requires more than a mere possibility that
unlawful conduct has occurred. “When a complaint pleads facts that are
‘merely consistent with’ a defendant’s liability, it ‘stops short of the line
between possibility and plausibility of ‘entitlement to relief.’’” Id.
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citing Twombly, 550 U.S. at 556). “Where there are wellpleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.”
Iqbal, 556 U.S. at 679.
The Court need not accept “‘unsupported conclusions and
unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir.
2007) (citation omitted), however, and “[l]egal conclusions made in the
guise of factual allegations . . . are given no presumption of truthfulness.”
Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 607, 609 (D.N.J. 2006)
(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v.
Barella, 489 F.3d 170, 177 (3d Cir. 2007) (quoting Evancho v. Fisher, 423
F.3d 347, 351 (3d Cir. 2005) (“[A] court need not credit either ‘bald
assertions’ or ‘legal conclusions’ in a complaint when deciding a motion to
dismiss.”)). Accord Iqbal, 556 U.S. at 678-80 (finding that pleadings that
are no more than conclusions are not entitled to the assumption of truth).
Further, although “detailed factual allegations” are not necessary, “a
plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’
requires more than labels and conclusions, and a formulaic recitation of a
cause of action’s elements will not do.” Twombly, 550 U.S. at 555 (internal
citations omitted). See also Iqbal, 556 U.S. at 678 (“Threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements,
do not suffice.”).
Thus, a motion to dismiss should be granted unless the plaintiff’s
factual allegations are “enough to raise a right to relief above the
speculative level on the assumption that all of the complaint’s allegations
are true (even if doubtful in fact).” Twombly, 550 U.S. at 556. “[W]here the
well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged-but it has not ‘shown’‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679.
Amenability to Suit as “Persons” under § 1983
The United States Supreme Court has held that “neither a State nor
its officials acting under their official capacities are ‘persons’ amenable to
suit under § 1983.” Will v. Michigan Dep’t of State Police, 491 U.S. 58, 71
(1989). As such, an employee of the State named as a defendant in a civil
rights action may be held liable for damages only if that person has
personal involvement in the alleged wrongs and is sued in their personal
capacity. See Hafer v. Melo, 502 U.S. 21, 31 (1991) (“state officials, sued in
their individual capacities, are ‘persons’ within the meaning of § 1983”).
“Local government bodies and their officials, by contrast, are regarded as
‘persons’ amenable to suit under § 1983.” Estate of Lagano v. Bergen Cty.
Prosecutor’s Office, 769 F.3d 850, 854 (3d Cir. 2014) (citing Monell v.
Department of Social Servs., 436 U.S. 658, 690 (1978)).
Eleventh Amendment Sovereign Immunity
The Eleventh Amendment incorporates a general principle of
sovereign immunity that bars citizens from bringing suits for damages
against any State in federal court. Pennhurst State Sch. & Hosp. v.
Halderman, 465 U.S. 89, 100-01 (1984). Sovereign immunity extends to
State agencies and State officers, “as long as the state is the real party in
interest.” Fitchik v. N.J. Transit Rail Operations, 873 F.2d 655, 659 (3d Cir.
1989). It does not extend to counties and municipalities. Mt. Healthy City
Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977); Bolden v. Southeastern Pa.
Transp. Auth., 953 F.2d 807, 813-14 (3d Cir. 1991) (“[A]lthough political
subdivisions of a state, such as counties and municipalities, fall within the
term ‘State’ as used in the Fourteenth Amendment, political subdivisions
are not ‘State[s]’ under the Eleventh Amendment.”).
Immunity for Injunctive Relief
On the other hand, “a state official in his or her official capacity, when
sued for injunctive relief, would be a person under § 1983 because officialcapacity actions for prospective relief are not treated as actions against the
State.” Will, 491 U.S. at 71 n.10. In addition, “the availability of prospective
relief of the sort awarded in Ex parte Young gives life to the Supremacy
Clause” and is therefore not barred by the Eleventh Amendment. Green v.
Mansour, 474 U.S. 64, 68 (1985). That is, “a federal court may, without
violating the Eleventh Amendment, issue a prospective injunction against a
state officer to end a continuing violation of federal law.” Price v. Medicaid
Director, 838 F.3d 739, 746-47 (6th Cir. 2016) (citing Ex parte Young, 209
U.S. 123. 159 (1908)). As such, “in suits concerning a state’s payment of
public benefits under federal law, a federal court may enjoin the state’s
officers to comply with federal law by awarding those benefits in a certain
way going forward—even if the court may not order those officers to pay out
public benefits wrongly withheld in the past.” Id. at 747 (citing Edelman v.
Jordan, 415 U.S. 651, 667-68 (1974)). “[A]n ancillary effect on the state
treasury is a permissible and often an inevitable consequence of the
principle announced in Ex parte Young.” Edelman, 415 U.S. at 668. To the
contrary, a retroactive award of monetary relief against the State is
“measured in terms of a monetary loss resulting from a past breach of a
legal duty on the part of the defendant state officials,” id., and would be
prohibited by the Eleventh Amendment.
“In determining whether the doctrine of Ex parte Young avoids an
Eleventh Amendment bar to suit, a court need only conduct a
‘straightforward inquiry into whether [the] complaint alleges an ongoing
violation of federal law and seeks relief properly characterized as
prospective.’” Verizon Md. Inc. v. Public Serv. Comm’n of Md., 535 U.S.
635, 645 (2002) (quoting Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S.
261, 296 (1997) (O'Connor, J., concurring in part and concurring in the
Insofar as Velez and Davey have been sued in their official capacities
for damages, the claims against them, all brought under § 1983, must be
dismissed because they are not amenable to suit. Additionally, Plaintiff has
not alleged an ongoing violation of federal law that injunctive relief would
abate, and granting Plaintiff’s relief would not prevent a threatened future
violation of federal law. Rather, Plaintiff seeks injunctive relief that would
direct Defendants to give effect to Deal’s December 2013 modified support
Order, rather than considering it a transfer of assets within the five-year
look back period, in order to adjust Deal’s Medicaid Waiver Program
eligibility to cover assisted living services of $63,411.28 for the period from
July 1, 2014 to February 28, 2015. The Court cannot find that to be
prospective relief. As such, Plaintiff’s claims for injunctive relief against the
Velez and Davey in their official capacities must be dismissed.
Further, the Amended Complaint contains no indication that either
Velez or Davey has been sued in her individual capacity and there is no
factual basis to infer that either had personal involvement in denying
Plaintiff’s eligibility for Medicaid benefits. Vicarious liability is inapplicable
to § 1983 suits. Ashcroft v. Iqbal, 556 U.S. 662, 676 (2009). Accordingly,
Velez and Davey will be dismissed from the suit.
While the County Defendants have joined in the State’s motion, they
cannot avail themselves of the argument that they are not amenable to suit
under § 1983. Additionally, application of the Eleventh Amendment to the
County Defendants would involve factual issues that cannot be resolved
from the face of the Complaint. See Mortensen, 549 F.2d at 891. Such
issues include (1) whether payment of any judgment against the County
Defendants would come from the State treasury, (2) the status of the
BCBOSS office under State law, and (3) the County Defendants’ degree of
autonomy. See Fitchik, 873 F.2d at 659. Accordingly, the Eleventh
Amendment argument advanced by Velez and Davey is inapplicable to the
Burlington County Defendants, Sanfilippo and Yulick.
Regarding the argument that Plaintiff’s claims are moot, the Court
does not find that Plaintiff received the relief she sought when she was
found eligible for benefits effective March 1, 2015. Therefore, the Amended
Complaint will not be dismissed on the ground that the matter is moot.
Further, Plaintiff has stated a claim regarding delays she faced in having
Deal’s applications processed; Defendants’ argument that any such delay
was Plaintiff’s fault is inappropriate on a motion to dismiss.
For these reasons, the State Defendants’ motion to dismiss will be
granted; Velez and Davey will be dismissed from the case. The County
Defendants’ joinder in the motion does not warrant their dismissal.
An appropriate Order will be entered.
Dated: March 20, 2017
/s/ Joseph H. Rodriguez
JOSEPH H. RODRIGUEZ
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?